23 Nov Building Pipelines: A Process That Can Be Replicated
Robert Kiyosaki told of a story between two men in his book “Rich Dad’s Cashflow Quadrant”. In the story, these two men were engaged by the city to transport water for the people. Immediately one of the men bought two buckets and he started making trips to and from a lake that was two miles away. Everyday he would make multiple trips that would pay the same about of money upon sell of the water. Sometimes he would have complaints from the dirt in the water, but he still made his money.
The other man hired a CEO, found some investors and then built a pipeline that produced water at a forth of the cost and was much cleaner. Once he established his pipeline, or the system that produced effortlessly, he went out to other small towns and villages and replicated the system. He built a pipeline that would work whether or not he was there.
This is a good example of what a franchise accomplishes. Many manufacturing companies also find a system that is simply replicated and mirrored again and again. This is the type of business investors like to acquire because they can invest and sit back and collect the dividends from the passively earned income; however, other investors like to buy businesses so they can apply management or technical skills to optimize and create additional value in the business.
Some investors or private equity groups have joined Deal Capital’s partners list to become one of the first informed of the opportunities that come available. Others have engaged out services to help them identify those companies that fit their strategic growth needs.